Wall Street set to open higher on earnings, M&A

By IBT Staff Reporter01/31/11 AT 2:14 PM

U.S. stocks were set for a higher open on Monday as merger activity and solid earnings, including Exxon Mobil, overshadowed concerns about the possible spread of unrest in Egypt to other parts of the Middle East.

Alpha Natural Resources said on Saturday it agreed to a $7.1 billion deal to buy Massey Energy Co, which would create the second largest U.S. coal miner by market value.

Protests to end the 30-year rule of President Hosni Mubarak continued, heightening risk aversion for European investors already concerned by their region's sovereign debt crisis and inflation.

(Egypt) is definitely not cleared up, but what is clear in the mind of the market is that there is an intelligent alternative to the current state of affairs, said Peter Kenny, managing director at Knight Equity Markets in Jersey City, New Jersey.

In the meantime, earnings have been quite good, guidance has largely been quite positive and macro trends remain, at the very minimum, modestly positive.

Further supporting the gains in stock futures was Commerce Department data that showed U.S. consumer spending rose more than expected in December to post a sixth straight month of gains.

Economic data still on tap for Monday includes the Chicago PMI for January, due out at 9:45 a.m..

In other M&A action, CNOOC Ltd will pay $1.3 billion in its second shale deal with America's Chesapeake Energy Corp, the latest move by China's top offshore oil producer in its aggressive drive for overseas acquisitions.

Chesapeake advanced 1.2 percent to $27.67 before the open.

Warehouse and distribution center owner AMB Property Corp and rival ProLogis said they would merge, one of the biggest real estate deals since the financial crisis.